From: China Securities News by Jin Rongshun
Compiler: Fund China

Recently, more and more dependent on the Fund is also through Resolution Increase way to expand scale to achieve the purpose. Statistics show that, after separation Placement, whether from a shorter point of view or from a longer point of view, These funds share of the net growth in units ranking than those Increase before with varying degrees of decline, Some have very severe downturn. This shows Placement of the fund units of the net growth in the fund’s performance does have a negative impact. There should be three reasons.

First, with the expansion of the scale of the Fund, the fund management operation of the difficulty will correspondingly increase, which will affect the performance of the Fund; Second, through Placement, the Fund size has suddenly expanded, Fund managers can adapt quickly to suddenly expanded larger scale operational management level, Fund performance led to the rapid decline; Third, the Fund Increase After the huge cash needs for a period of time Jiancang period, and now is in the rising phase of the stock market, just to raise some idle cash price is not entitled to the benefits of rising, correspondingly lower share of the original holders of the Fund’s share of net unit growth, although the net value of fund shares is still growing. These factors indirectly helped fund the original share holders interests of a hidden losses, This loss of the Fund so that the original share holders more disappointing.

Although the fund is the expansion of the scale of the fund for the development of normal circumstances, the Fund share holders should not raise objections, But apart from the first recruitment, after the massive Placement of the original fund share holders interests of the more serious negative impact, therefore, hope that the Fund is through sustained marketing approach gradually expand the size of not because of the scale and impact of sudden expansion of the Fund’s performance.

Moreover, in order to preserve the original share holders of the Fund’s interest and funds more standardized operation recommendations of the original fund management rules, and rules accordingly amended and improved. If the fund contract, should not only clear the Fund’s maximum size limit. It should also be clear that the Fund Increase the launch conditions, the highest share of such funds of 100 million copies. less than 10 million copies of the net value of one billion yuan, or can be activated at any time Increase procedures, more than 30 million copies of the net value of 3 billion yuan or may not start Placement procedures, Increase before each share of the net value of the unit shall be not less than 3.00 yuan. regrouping Increase share of the net funds Increase the price is not lower than 1.30 yuan (to avoid the drop once the market trend net share of the Fund and the fund fell below the face value of the net proceeds realized although no dividends but the embarrassing situation), Increase each only 10 million copies of the limited share of the Fund, through Resolution simultaneously massive Increase, Not only should the approval of the SFC, also received a share holders approved by the General Assembly, and so on. This will enable investors to have a clear prior expectations.

In addition, the Fund should be encouraged by improving their level of performance to a sustained marketing, rather than a sudden expansion.

Copyright Fund China 2008.

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